What unsustainable habits do you see in AV that need to change?
There’s a lot of resistance to moving towards the kind of managed services model we see in other industries. When it comes to aircraft and trains, for example, most companies only pay per hour to rent them. We believe that kind of model is five to seven years away in AV and it is going to radically change everything.
Right now, nobody in the pro AV world wants it. They just want the status quo so that everyone is incentivised to buy new hardware. But it’s not a sustainable model. The industry can’t just throw everything away.
Look at what’s happening with buildings nowadays. We have a big office building right next to us in our office in Germany. Instead of knocking it down, the owners are renovating it by throwing away the facade elements, but keeping all the concrete structure. It will last another 25 years. We can apply the same principles of conservation
to AV equipment.
How would a managed services model work in practice for clients?
Similar to the IT sector, clients will in future buy the availability of a screen, rather than the screen itself. Such a model requires the AV integrators to change their mindsets. But that will have to happen, or the IT integrators – who already know everything about managed services – will move into the AV sector and take the work available. We’re already seeing them start to eat the cake of the AV integrators.
With such a managed services approach, we can talk more about the life cycle management of a screen. For example, a luxury retailer could use the screen from new for a couple of years, then it could be recycled to a supermarket for five more years, then maybe it would even have a third life – let’s say in a warehouse for much longer. That’s a more sustainable model for AV.
Taking the higher education sector as an example: The universities use a lot of AV equipment, but I cannot see why they would want to buy screens if they had a more economic and sustainable alternative. How many hours does a screen get used in a lecture hall? Rarely more than five. With a managed services approach, a university would rent it from a company that would monitor it remotely from a network operation centre.
How would it affect the bottom line for the manufacturers of AV equipment?
They rely a lot at the moment on selling hardware to make money and companies constantly replacing AV with newer, better models. But that’s unsustainable. They need to move towards a software-defined pro AV model. A 4K screen is more than enough for nearly everyone’s requirements today. The focus should switch more to the software inside customers might need to upgrade.
So, ideally, companies would produce annual software upgrades, like with the iPhone, rather than expecting customers to throw away hardware and replace it. Samsung has foreseen a more sustainable future and introduced its new VXT software platform. Right now, Samsung is probably making 98 percent of revenue from hardware sales. But in five years’ time will that model change and become 60 percent profit from software? The margins on hardware are lower than they used to be.
However, nothing is straightforward when it comes to sustainability, even software. It’s really fascinating to look at the carbon footprint of software. It’s incredible how many of the data centres in the UK, Europe and the US are still using diesel generators rather than greener sources of energy like ethanol. The more data that is being sent to the cloud, the bigger the footprint.
The big companies like Google and Microsoft are all missing their targets as they are supposed to be carbon neutral by 2030. That’s because of AI, which has a huge energy impact. So, the issue of making greener software is becoming a big discussion point.
Which sustainable products have impressed you?
Philips has two products that are quite interesting. One product has a replaceable SOC, which is the computing module inside. Usually, the SOC is irreplaceable as it’s the main board and reaches end of life after five years as you can’t get more updates. So being able to replace it and keep the screen is handy and sustainable. A second Philips’ product I like uses 40 percent less energy because they’ve redesigned the backlight, which normally consumes 90 percent of the LCD screen’s power.
Dynascan, the Taiwanese producer of high-brightness outdoor displays, also has a product I’m impressed with. The company’s displays sit by the side of roads and change brightness when a car approaches, or when the sun’s rays are powerful. The screens are now connected to AI and the sensors can detect when a car is approaching and the brightness of its headlights, and make adjustments accordingly. The energy cost savings per screen run to hundreds of euros a year, which is huge when multiplied across a fleet of screens.
It’s a good example of the role AI can play in a more sustainable future. We believe every screen will eventually have sensors attached, so the brightness can be changed according to how many people are in front of it, or can be reduced when there’s no one there.
Are manufacturers assembling closer to their target markets?
Yes, we’re seeing more companies assemble their AV products closer to the target markets, so that they ship only some of the component parts from China, then do the final assembly in the EU, or in Turkey. That makes an important difference to the amount of carbon shipped.
All manufacturers are having to diversify supply lines now, although it’s not such a popular subject when I bring it up as most of them still rely too much on China. But there are also fears that, at some stage, for geopolitical reasons, we could face a trade war with China. Another important factor is the stigma attached to importing from China now. It’s the reason why Samsung’s The Wall is assembled in Slovakia in the EU – they can’t sell “Made in China” any more, especially when it comes to LED, or
video controllers.
Even Chinese manufacturers like Unilumin are now assembling some of their products in Europe and then selling them to North America because they cannot sell “Made in China” in the US any more. Sustainability is one of the reasons behind the changes. But it’s obviously also political. The market is changing, and manufacturers have to adapt to that, and be more flexible.
How will EU legislation about carbon credits affect the industry?
Towards the end of the decade, companies will need to buy a lot more carbon credits. Currently, they still get a lot of free ones, but every year there are fewer, and by the end of the decade, basically they’ll need to pay for all the carbon credits. We believe it could add on average somewhere between US$100 or US$200 on top to the existing cost of a device, looking across the whole life cycle. But having more efficient screens will also save companies from spending so much on carbon credits, and it will be a big incentive for them to purchase more sustainable equipment.
What do you think of current certification?
The sheer number of certificates is overwhelming and the vast majority of them are not worth the paper they are printed on. One popular certification basically says that your latest generation of products is more sustainable than the earlier generation, rather than measuring it against objective standards.
But some are very good, such as B Corp Certification, which evaluates both social and environmental performance more objectively, and EcoVadis is another excellent measure and definitely something which has become necessary for larger tenders. If integrators are not certified they will have a problem participating.
Another reason why the big IT integrators will win more business and get a bigger market share in AV is because they can afford it. They have the defined processes, and for them, it’s easier to certify their operations.
Do attitudes to sustainability change in different parts of the world?
The awareness for sustainability in Asia, where most of the vendors are, is very different. One reason is that electricity is far cheaper so there’s less incentive to save energy. I was recently visiting a company in Korea and the chief engineer said to me: ‘Are you serious? Do we really need to look at energy efficient devices?’
Samsung’s software team introduced the VXT and they’re doing a great job, but they face a lot of opposition from within the organisation. The hardware guys still rule the roost. The feeling is ‘we’re a hardware company and the more we ship, the better it is’. It needs a change of mindset.
The Japanese manufacturers are the best prepared of the Asian companies. That’s because in Japan, the awareness for sustainability is greater than in Korea and China. So, the ranking would be Europe first – streets ahead of the rest, then Japan some way behind.
Even North America is three to five years behind Europe. If you go to the ISE show in Barcelona, you’ll see the latest energy-efficient products being promoted, but if you attend InfoComm in Las Vegas three months later there’s not nearly as much promotion of green products. Some of the products are the same ones, but often they try to sell the other stuff in the US, as they cannot sell them to Europe any more.
In California they’re already quickly adopting a lot of the attitudes to sustainability that we have in Europe. And the rest of the US will catch up as more stringent regulations take effect. Some of the bigger US integrators do get sustainability and they’re already using it as a USP – to say, ‘we are thought leaders in the sector. We know what other companies in Europe want’. And it’s true that many of the European companies also have businesses in North America, so they’re introducing similar standards. So attitudes to sustainability are changing fast in North America.
