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How to Make Money Selling More Than AV Systems

In a tough business climate, stability is key. As a result, many AV pros are focused on diversification. Their goal? Create new services or grow existing offerings in order to generate recurring, more predictable revenue, from maintenance contracts and training to content. Here's how.

Content Delivery Services

Meggin Anderson of Baystate Audio and Media says her company typically secures five-year contracts for supplying and managing business music. The company is also exploring digital signage advertising and content.

Meggin Anderson of Baystate Audio and Media says her company typically secures five-year contracts for supplying and managing business music. The company is also exploring digital signage advertising and content.

Credit: Matt Teuten/Aurora Select

And as AV becomes as much about the message as the messenger, offering content services can open a fresh revenue stream, though it likely falls further outside a company's core skill set. Even if you have no interest in investing in the software, hardware, and IT skills needed to create, store, and/or deliver digital signage content, for example, there are pieces of the pie worth carving off.

Traditionally, so-called business music was classified as background music (aka "elevator music"), whose sole purpose was to be noticed only in its absence. Now, as foreground music (often paired with video), it's meant to be noticed and can be key to branding strategies in retail and hospitality venues. AV companies that provide such multimedia content enjoy recurring revenue, typically on a subscription basis. "The recurring content supply through subscription is a small but growing part of our business" says Meggin Anderson of Baystate Audio and Media in Shrewsbury, Mass., a systems integration firm that also offers business music. "It accounts for about 25 [percent] to 30 percent of our revenue."

Anderson says opportunities to supply content are exploding. And with the right offerings, content services can mean reliable revenue. Baystate's typical contract has been for five years, though the company offers one-, three-, and five-year contracts.

"We add incentives to stay with us or to take on a longer term," Anderson says. "Typically our clients only cancel if they go out of business." Why? Anderson says the key is excellent service. "Our systems come with a warranty that includes service. Also, we do all the ASCAP and BMI reporting [required by law for using copyrighted content in a commercial setting], and we promote that to the customer. It keeps them legally safe and also saves them the legwork of having to do it themselves."

Business music and video integrators, who might be considered digital signage companies, need an understanding of branding and how their content helps clients. Integrating advertising can help offset system and subscription costs.

For many AV integrators, this is all a new frontier. "We're dabbling in digital signage by bringing in advertising," Anderson says. "We have an independent vendor we partner with that can do content creation, including producing in-house ads for our clients."

But ultimately, any plan for generating recurring services revenue comes back to the same thing. Asked for the key to Baystate Audio and Media's success, Anderson answers simply, "It's our support."

Jeanne Stiernberg is a principal consultant with Stiernberg Consulting, a Sherman Oaks, Calif.-based business development consultancy serving the converging entertainment technology, music products, and electronic systems industry worldwide. E-mail her at jeanne@stiernberg.com.



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