Interview: Co-CEO Dr Andreas Sennheiser9 May 2016
Dr Andreas Sennheiser took over the running of his family business with his brother Daniel in May of 2013. In the three years since, the company has released some notable technology – but there have been some serious changes at the company along the way. In an wide-ranging and candid interview, Dave Robinson discovers what the young co-CEO thinks about the $50k Orpheus headphones, the restructuring of the company, the fiercely competitive marketplace and what gets him out of bed in a morning…
Let’s begin with AMBEO, your 3D, immersive audio concept.
Dr Andreas Sennheiser: At CES, we launched something we’ve been working on for the last 5-7 years: algorithms for ‘immersive audio’. When we started research, we thought it was going to be relevant: it was a gut feeling that what exists wasn’t good enough. While we did research on these algorithms, we didn’t know where it was going to go, but with big content providers such as Universal and Red Bull Media embarking in 360-degree video and immersive audio recordings in the last 12-18 months, suddenly a huge new world has opened up for us. So, we’ve started to compile all the technology into distinct solutions for recording, mixing, processing, playing back. And that’s what we showed with the AMBEO brand at CES [and NAMM and PL+S]. It’s the starting point of something we will develop with our customers.
We really are positioning ourselves to take advantage of whatever 3D format emerges, a format with a higher emotional impact. Many artists have said to us, the only way to really connect with the audience the way they want to is to play live – but if they had a format that captured that, so that users at home could listen to it in a way similar to actually being there, then they would have a higher engagement with the listeners. That’s when we got serious about bringing AMBEO to the market.
At NAMM you demonstrated a surround-style ‘tetra mic’, with its ‘virtual miking technique’ software, which could change the way things are recorded…
The interesting thing about this is that we have to combine different technologies in order to make the immersive experience perfect; to integrate different technologies to make the transition from reality to virtual reality seamless.
With third party involvement?
By presenting it in its initial stage, it’s an invitation to our customers to think ahead, whether that’s a possible approach for them, how they would use it, and to find new applications for it. It’s all software based at the moment – we have a virtualisation algorithm, an upmix algorithm – we don’t really have a hardware decoder at this point, but if we see a stronger need, we can go in that direction, too.
Let’s talk about Orpheus, the HE 1, the ‘world’s most expensive headphone’.
The HE 1 for us is a product, a statement, and an indication of our innovation culture, to a certain extent. We could have said, we still have the Orpheus from 1991, it’s still considered the best headphone in the world, why do something better? But part of our culture is to not be happy with anything that exists now, regardless of whether we invented it or not. About 10 years ago, we decided it was the time for the world to experience the next level. On one hand, it’s beyond common sense. But, on the other, by being so intensively on the limits of physics, we learn so much for other applications.
You make it sound like the Space Programme…
Yes, exactly, and this pushes the entire Sennheiser culture into new ways. Think about the effect this has at the company when a group of people bring out a flagship that will be there for another couple of decades. That has a huge motivational impact on the other employees; at the same time, it tells the industry that what exists is not good enough for Sennheiser, so we will push it forward.
I’ve heard the HE 1s. They make sound ‘visceral’, I would suggest.
People have ‘seen’ things, heard things which they haven’t heard before, or been able to describe.
Do you think they are worth $50,000?
[Immediately] Absolutely. No doubt.
What sort of reaction have you had to them?
A product like this is dividing: people who rave about it, others who say, Is it worth the money? But to me, it’s not the point: it’s about buying into an exclusivity which sets you apart, in a positive way, from the masses. It’s connoisseurship. From the feedback we’ve got, most of the customers who are interested in the HE 1 are audiophiles who say, Audio is my life.
The original Orpheus had a run of some 300 units. When HE 1 ships later this year, will that be limited to 300 too?
We are not planning any limitation this time: but it is limited by the price and the capacity – making one per day – and the level of customisation. We have significant requests for customised versions.
You mean I can have them in pink?
Someone wants it in solid jade instead of marble, for instance. The exclusivity includes the concept of a one-off product, as long as the sound properties are not affected.
How many do you think you’ll be making?
We have more than 50 ordered. I don’t believe it’s going to stop at 100 or 200. I personally believe that it’s something that’s going to be with you for life, and we will offer servicing on it so it will be with you as long as you want to enjoy it.
Turning to the other end of the market, consumer headphones: it’s an increasingly aggressive and crowded marketplace. What is Sennheiser doing there?
We’re trying to be more focused on specific target groups. With the Momentum line, for example, we are targeting a specific type of personality, people who have a certain style and way of expressing themselves. We’re not just looking at price points and shelf space, and that will set us apart from just having X metres of headphone hangers.
You put into place a ‘selective distribution’ model a couple of years ago – other makes have done that too…
It ensures that the brand is represented in the appropriate way. If [our models] were at a cash-and-carry checkout for five pounds [six euros], it would just damage the brand. You can’t credibly have a product like that and the HE 1.
Are you worried that brands like Beats are changing the market?
It’s not necessarily a concern – it is, rather, keeping us on our toes. That increasingly competitive environment was beneficial in two ways: one, it grew the market; two, it forced us to think what Sennheiser is all about, what is at our core, what is our heritage. We’re the only ones to have the 1968 invention of the open-back HD 414 headphone; we’re the only one that has the innovation culture and heritage. How can we use that to be more relevant and have a higher value for the customer? So, with the success of the Momentum line, the higher end HD 800 line, the professional headphones – the HD 25 still being an icon – this process has been healthy for us because it gave us a stronger sense of identity which we are able to communicate.
How successful has the D9000 digital wireless system been?
It’s a huge success, especially in the last year where the ‘Digital Dividend’ [spectrum sell-off] in Japan gave us extra demand and business. Digital 9000 is successful beyond our initial imagination for a simple reason: we positioned and developed it as a system to be used on stage for singers and touring, because it was so flexible. But the corporate world has discovered it, because of its high-level encryption and flexibility in use. We saw a lot of companies adopt it, such as a major American retail chain. There’s a huge market there.
Since you and your brother Daniel became joint CEOs three years ago, you’ve restructured the company. I get the impression, some of that has been easy, and some of it has been hard. Is that correct?
We went from a territorial approach to a sales channel approach. In Europe, there’s no borders for commerce. Consumer is one part, professional is another, and so on.
In a reorganisation like that, you always have a working assumption. Sometimes you assume, sometimes you just hope for the best. The reorganisation was a great success, especially with the feedback we got from our customers. Did everything work out like we planned? With a change of that magnitude, we discovered things we had to fine-tune. That was a learning experience. For us it was more important to go in the direction that makes sense for the future rather than stay with something we know but might not be any longer relevant.
Some of your ideas were quite radical: staff had to look at their roles within the company and say, this is what I do, and this is what I want to do…
You are spot on. We had hundreds of people in new roles, so there was an element of change management.
…Which can be difficult.
Absolutely! And I have empathy with people who are uncertain for a period, who have to find their role and it’s not all clear from Day One. But part of our culture is to go through changes with our employees, and that means everyone can design their future and their fate, which brings the downside of uncertainty with it.
But some people don’t want to do that.
Yes, but it’s part of our nature to involve people in their own destiny rather than giving them 100% certainty but no influence.
The impression I got from the staff video, made for the company’s 70th anniversary last year, is that your employees are pleased to be a part of the Sennheiser phenomenon. The smiles from the people in the factory were natural, not forced.
The passion and commitment, the joy of what we do is everywhere at Sennheiser. And that’s really part of my personal motivation. Seeing people committed to that extent gives me a reason to go forward.
Do you ever feel the burden of the family legacy, though? When you wake up, do you ever think, [in panicked voice] ‘Oh God, I’m running Sennheiser!’…?
[Smiling broadly] With great responsibility comes a certain weight. You have to think about what is good for the company, the customers, the employees. There are moments of doubt and pressure, but all-in-all, what makes me so confident of getting up in the morning is that I’m not alone here, there are 2,700 people who are highly committed and enjoy what they do. It’s not on my shoulders, it’s on 2,700 pairs of shoulders making their own destiny. With that in my mind, it’s easy to get up and assume that responsibility.
Good answer! What do you think you still need to do at the company?
Become quicker, more nimble to reacting to customer feedback.
Sennheiser seems to think about what it’s going to do, thinks some more, and then makes its move. It took you ages to adopt Dante, for instance. That approach can be positive – but negative too.
If 80% of our decisions are well-thought through and strategically directed, that’s exactly what we need. In hindsight, we could have taken some decisions earlier. On the other hand, ‘German engineering and thinking’ takes time. What our next challenge will be, is to preserve the thoroughness of where we want to go, but add an element of ‘start-up’ activity. A start-up culture with 70 years of experience, if you will. If we can do that, then we will be even quicker when supplying the customers with what they want.
Last question: the factory is on fire – you run in and grab three items. What are they?
First, the photo of my grandfather [Fritz Sennheiser, who started the company]. Second, the Emmy Award. [In 2013, Sennheiser was awarded the Philo T. Farnsworth Award, presented to a company whose “contributions over time have significantly impacted television technology and engineering”.] Third, my trolley, which holds all the stuff I use for daily work…
But which one product do you put on that trolley?
Not a classic microphone or headphone?
D9000 is a statement of innovation, and is ‘classic’ at the same time. It’s one of a kind. It’s an icon. It shows all the competency that’s in this company.
+ A shorter version of this interview appears in the PSNEurope June 2016 edtion