Audio Collaborative 2019: More Audio Market Facts, Trends and Predictions

December 13 2019, 13:10
Following my previous three reports on the latest Audio Collaborative event, promoted every year by market research firm Futuresource Consulting, I thought I should conclude my coverage this week with a brief overview of the other remaining topics and panels featured in the 2019 schedule. As I said before, there's simply so much useful and inspiring information discussed during this one-day event, that I truly feel the need to report on the different trends and markets with dedicated reports - and from the feedback received, this has been truly appreciated by our global audience.

Because this year, due to some technical glitches, not all audio recordings of the different sessions have been available, I am not able to quote some of the statements of the remaining panels, so I will resort mainly to my own notes and I will use the chance to highlight some of the excellent commentary also provided by Futuresource.

One of the panels that I didn't address in my previous reports was focused on "The Continued Rise of the Home Studio and Prosumer Content Creator." Moderated by Chris Mcintyre-Brown, Associate Director of Professional AV at Futuresource Consulting, the panel included Helienne Lindvall, Director of Business Development and Relations at LANDR UK (an online music service for musicians); Joscha Kretschmann, Team Lead Manager, Professional Product Management at Beyerdynamic; Timothy Carroll, CEO, Focusrite Engineering; and Robbie Dunne, Managing Director, Miloco Studios.

According to Chris Mcintyre-Brown, this market segment, which has been undergoing an extraordinary pace of change, represents one-fifth of all pro audio hardware equipment spending globally, and approximately half of the investments in the studio space are made for home studios, where much larger volumes of lower-priced products are also sold.
"The Continued Rise of the Home Studio and Prosumer Content Creator" discussion panel, moderated by Chris Mcintyre-Brown.
That is an interesting point, given that the growth in the studio market is currently attributed to completely new buyer profiles, many of whom don't even own a "studio" as such, and are mainly enthusiasts looking to dive into content creation, looking to share videos on YouTube and social media. There's also a significant increase in portable recording and podcasting production, with equipment investments mainly included in this "home studio" category. The members of this panel confirmed this trend, and highlighted the fact that these new users are not as technically-minded as the traditional "studio tech" people, and are essentially users who are looking for results and they "want technology out of the way."

And that's where clearly there is a market opportunity, as Timothy Carroll from Focusrite confirmed, since there are education opportunities here - "perfecting the craft takes time," he said - and new users are looking for new types of tools and plug-and-play bundles. While social is clearly providing the incentive for people to invest in production tools, those users looking for their "15 minutes of fame" are not necessarily going to be very patient if technology gets in the way. And that is precisely why a new generation of content production software is now focusing on providing online services, where those users can connect with a community of other users, find useful tips, access training resources, and even get support from other users, through online collaboration tools - sometimes even in real time.

As Helienne Lindvall, from LANDR, explained regarding her company's business model, there is a new generation of users accessing those online services and tools, attracted by the fact that "technology is now out of the way." LANDR offers online mastering services and it can serve an expanded user base because those users have access to tools that provide "professional" results by making use of artificial intelligence (AI). As Lindvall states, there is a democratization happening for content creators, empowered by those AI tools and online resources.
During these Audio Collaborative events, companies have a valuable opportunity to showcase their latest audio technologies. Analog Devices did just that, showing Bowers & Wilkins line of 2019 headphones, designed from the ground up leveraging the ultra-low power Qualcomm QCC5100 Series Bluetooth Audio SoCs with the all new aptX Adaptive audio technology, and the latest-generation ANC technology from Analog Devices that runs at 16 times the sampling rate to ensure best-in-class noise cancelling with no degradation to the audio quality.
But at the same time, as Robbie Dunne, Managing Director for Miloco Studios confirmed, their own commercial studios are busier than ever thanks to the fact that there are now more and different clients, including people from companies such as Audible, recording audiobooks, and with musicians spending more time in the studio regularly recording tracks for online services, doing live streaming sessions, or simply preparing for international tours. Commercial studios who adapted to those changes and are able to accommodate new production needs are seeing increased business. That's good to know.
Gerry Holman, VP of sales and business development Europe for Linkplay, one of the event sponsors. With a global hardware and software engineering team, Linkplay works with audio brands to provide audio technology solutions for wireless connectivity via Wi-Fi or Bluetooth, and has helped many companies implement voice recognition.
The next topic I had planned to address in this last report was focused on the headphones, in-ear monitors and hearables. And I saved that one for last, knowing that Futuresource was about to publish its latest Headphones Market Report, as it was finally announced this week. Since you can get the updated conclusions and stats already in that specific announcement, I am not going to repeat what was discussed by Market Analyst Guy Hammett in his presentation on the "Home Audio and Headphones Market Facts and Trends."

Unfortunately, one of the missing audio recordings was from the very interesting panel "Hearables & Disruptive Technologies Redefines the Premium Headphones and Hearing Health Market," which was moderated by Luke Pearce from Futuresource, and included Tim Johnston, Senior Vice President & General Manager of the Headphones Business Unit at Bowers & Wilkins; Gerard Loosschilder, Vice President, Market Insights at Widex; Chris Havell, Senior Director of Product Marketing, Voice & Music at Qualcomm; Mike Dias, Executive Director - In-Ear Monitor International Trade Organization; and Danny Aronson, CEO & Co-Founder, EVEN.
The "Hearables & Disruptive Technologies Redefines the Premium Headphones and Hearing Health Market" panel, moderated by Luke Pearce from Futuresource.
All these industry professionals confirmed some of the main trends that had already been discussed in the Futuresource briefings, including the very strong market momentum for headphones, the perfect market storm generated by the popularity of music streaming services, and the popularity of smartphones, basically enabling consumers globally to be able to listen to music anywhere and anytime, and finally how the removal of the headphone jack from smartphones is powering the true wireless segment. The panel also discussed how the emergence of a new generation of consumers much more open to premium features and advanced technology is paving the way for manufacturers to experiment with features like personalization, in order to differentiate, and how the enthusiasts market is still thriving for higher quality experiences and open to high resolution audio and immersive experiences.
In his presentation about "Home Audio and Headphones Market Facts and Trends," Futuresource market analyst Guy Hammett discussed the different use cases for headphones and wireless earbuds in particular.
On the topic of true wireless, there were interesting references to the fact that audio companies only now are able to properly compete with Apple in the space, given the availability of dedicated low power SoC's, such as the ones from Qualcomm. The topic of hearing augmentation implemented in standard TWS products is something that all members of the panel believe is coming - for some, clearly an opportunity, for others, a threat - even if mostly all agreed that the differentiation between audiology and medical features and enhancement implemented in consumer products - or hearables - will continue.

The most interesting part of that debate, given the diversity of the panel, was the number of features that were said to be popular and/or desirable in consumer hearables. Features such as personal audiograms supported by apps, or the combination of advanced features such as active noise cancelling and audio transparency to provide adjustable spatial awareness. But the engineering experience in the panel was also reflected in the fact that it was agreed that manufacturers should not try to have one device to do everything, and instead focus on doing a few things very well - like Apple does. 

Also, a few major threats and challenges mentioned in the TWS segment included the ability for companies such as Apple, Samsung, or Amazon to continue to dominate the space simply by bundling products, the possibility that health issues resulting from consumers listening to music on headphones for five or more hours a day could cause a regulation backlash, or simply the overpromise of things that are technologically complicated, such as real-time translation, which could cause consumer confusion. The topic of virtual assistants on-the-move through in-ear true wireless earbuds, and voice assistants being summoned directly through connected hearables, was not consensual. While some members of the panel believe that is a major opportunity, others feel it is one the greatest challenges and one of the reasons why the big players in the voice space could continue to "eat the audio brand's space," as Guy Hammett described it in his presentation.
Another interesting chart with real market data on voice assistant usage on headphones.
Those are all topics that Futuresource has been addressing in its market reports. In a recent comment on "Key Audio Trends to Expect in 2020," Futuresource analysts predicted that "the recent launch of Amazon's, Google's, and Apple's next generation of true wireless earbuds, as well as the introduction of wake words enabling hands-free access to virtual assistants, is likely to help establish the big three at the forefront of this strategic segment, predicted to account for 43% of global headphone shipments in 2023." Among the opportunities for 2020, is the increased use of high-quality lossless formats (e.g., FLAC), as well as the rise of Qualcomm's aptX Adaptive and Sony's LDAC Bluetooth codecs, allowing Bluetooth devices to play higher audio quality files. "Coupled with cheaper mobile data and increased speeds due to 5G rollout, high quality audio content consumption could soon become a mass market reality."

"Ultimately, smart speakers and headphones will lead to greater content consumption, and the same can be claimed in reverse - consumers insatiable appetite for more digital content (podcasts, audiobooks, music and gaming) is driving demand for hardware. This is beneficial for the entire industry, as audio brands only need to capture a minor percent of this large and rapidly growing market to significantly increase their revenues," Futuresource states also.

At this year's event there was still time for a panel on "The Future Role of Audio in Automotive," which I will certainly address in my next audioXpress Automotive Audio Market Update, scheduled for our June 2020 edition. The Audio Collaborative 2019 event also concluded with an excellent presentation by David Sidebottom, principal analyst at Futuresource Consulting, addressing the "Rise of the Super Content Aggregators in Music, TV, Video and Games," an important topic that we will need to revisit in 2020.

I hope these summaries of Futuresource's excellent 2019 Audio Collaborative event will motivate more industry professionals and many of our readers to participate in the 2020 edition. After all, as Futuresource's analysts state, "The world of audio is in ascendance, with renewed consumer interest and a groundswell of technological innovation from couch to car. As 2020 looms, the growth curve continues to track upwards."
Good! Good!

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