Audio Industry Should Target Prosumer Channels: Bluesalve's Kaplan

The home audio industry, facing declines in traditional categories including AV receivers and loudspeakers, should explore new opportunities in adjacent markets such as podcasting and creators, blogged Dave Kaplan, partner at consulting firm bluesalve last week.

The industry “could certainly use the lift,” Kaplan said, saying over the past two decades, “technological disruption has decimated multiple product categories.” He cited surround-sound speakers and disc players. The tide may be rising again, Kaplan said, citing shifting market trends and opportunities to sell to the “prosumer.”

Though the prosumer category isn’t new -- Kaplan noted the term gained popularity in the mid-1980s to describe professional wedding videos shot with camcorders -- the lines between pro and consumer markets have “blurred beyond recognition.” Even Oscar-winning directors have shot feature films with a smartphone, he noted, citing a MotionCue article, “The 9 Best Movies Shot on Smartphones.”

Kaplan cited the 2 million podcasts available worldwide, a $2 billion business, saying most were done outside of a professional studio. Podcasters “buy lots of recording and post-production gear,” and their numbers “cannot be ignored as a niche,” Kaplan said. He cited Interactive Advertising Bureau projections that podcast advertising revenue will exceed $4 billion by 2024.

Podcasting is just one growing category presenting an opportunity for audio companies, Kaplan told us Friday, adding the growing creator market of musicians, influencers, DJs and home studio producers that “exploded” during the COVID-19 pandemic when most people were learning and working from home for an extended period. He cited data from Music Trades saying retailers logged $8.9 billion in musical instrument and gear sales last year, a 22% increase over 2021.

Those crossover customers offer audio companies a lot of opportunity because sound quality matters to them, Kaplan said. He noted a few names on the pro audio side that have made inroads into the consumer business, including British audio legend Rupert Neve who brought the Fidelice line of high-end audio products to the U.S., and Apogee, which started out in digital audio with filters for studio recorders and now sells a “budget-friendly” digital-to-analog converter for smartphones.

In a Facebook discussion about Kaplan’s blog post, audio engineer Ken Kantor, formerly with ZT Amplifiers and NHT Audio, noted a number of traditional audio companies entered the prosumer space before the most recent influx of creators. Among those he named were Harman, Behringer, Alesis, Tascam, Roland, PreSonus, Audio-Technica, Sony and Yamaha. “It’s a highly saturated market now,” Kantor said. Responding to another comment on the fragmented nature of the prosumer audio category, Kantor said fragmented markets are “the most difficult to enter. Gaining mindshare and establishing distribution channels takes deep pockets and a lot of patience.”

Tom Rayfield, head of global key accounts-consumer electronics for Sennheiser, agreed. “Personal experience with Sennheiser showcased the challenges of the prosumer market,” Rayfield said: “It's pretty crowded and competitive right now with the end user being just as fickle as in high-end audio. Cracking that market is no walk in the park.”

Kaplan told us that despite the challenges, more traditional audio companies should be expanding their markets, exploiting the growth in the podcasters and creator segments. “It’s important to have peripheral vision, get out of the legacy mode, look at the world as it is, and you’re going to find that there are some significant opportunities out there,” he said.