Genius!2: Glenn Roggeman and material banking #724 October 2016
“The audio visual rental industry is pretty much a company-driven industry with rental companies individually over-investing in equipment, cables, dollies… In the festival and concert season, every AV-company is on the look-out for extra gear, compatible with their own brands – the off-season sees warehouses full of unused equipment…That was my ‘eureka’ moment, back in 1985,” reveals Glenn Roggeman, CEO of AED group. “I came up with the idea of combining standardisation and sharing economy, not in currency but in speakers, amplifiers, consoles and lighting. A unique model offering professional rental companies a massive inventory of standard audio, lighting and video equipment.”
Between 1985 and 2003, AED made its way in providing audio and lighting solutions for all kinds of events and concerts. “We had to – the industry just wasn’t ready for the unique formula I had cooked,” underlines Roggeman.
A crucial decision to introduce his new business model came when AED group stopping taking on productions in 2003. “We had been doing big assignments ourselves since day one. We’ve been there, I tell you – we know how difficult it is to provide audio kit for two or more festivals simultaneously! And that’s where the roots of the AED Rent business model, are, based on the principles of sharing economy,” says Roggeman. “Although I must admit that my decision to stop doing productions met with almost unanimous resistance from our staff – but, two years later, when the new formula broke, they were all convinced.”
The key technology to achieve a working business model was in fact the establishment of an interactive workflow (the first version dates back from 1991) administering the management of AED group’s assets from within the four walls of the company headquarters. “Today, we use touch-screen displays in all of our warehouses for this purpose,” Roggeman adds.
The unique elements in AED group’s material banking model are AED’s neutral position on the market, the standardisation of the assets, the fixed rental rates structure and the continuous maintenance of the equipment. “The big disadvantage is that with such a transparent business, we have become an example for numerous dry-hire copycats throughout Europe. It’s really extreme…they undercut our rates but don’t offer our quality, range of products or service,” emphasises Roggeman.
Despite AED group’s pan-European reputation and fame, Roggeman feels that the industry still puts question-marks on the company’s neutrality: people who see AED Rent as a rival eating away other’s assignments. “But today, we have over 2,000 clients, companies from small to XXL, who prefer to see AED Rent as a part of their solution rather than a competitor,” he enthuses, adding that the standardisation and the sustainable sharing economy model was completely finalised in 2015, with extra features such as second-hand, lease and flex-lease options.
Roggeman will remain faithful to his adage ‘not supplying to end-users’, he says. With an extra capital injection of 100 million euros (around £88 million) within the next 12 months, he continues to fight price-cutting. “Either by acquiring copycat companies or by strategically entering the other segments, like with our budget model rental (Blue) list. I’m thinking of a dedicated budget-rental inventory of four-year-old (but perfect condition) gear. Or to start our own ‘chinese’ manufacturing chain in an ecological/economical, friendly way. And we’re also looking to a ‘pay per use’ budget model for the near future.”
Published earlier this year and sponsored by QSC Audio, Genius!2 is the second edition celebrating those clever people whose inventions have transformed the world of professional audio. The 30-page supplement is also available to read in a handy digital-edition form