Will everything Behringer touches turn to gold?1 April 2010
Behringer is installing itself into new markets. At the recent Partner Event, the company opened its doors and answered some searching questions, says Rob Speight
Behringer has never really been seen as a major part of the pro-audio world. The company was strictly MI, strictly for musicians on a budget – and this is something that Uli Behringer (pictured) himself has always evangelised ("Half the price, twice the value!"). Yet, it seems Behringer the company is changing – and how. It has not so much straddled the great home/pro-audio wall, but has leapt over it with gusto and what would seem to be a new sense of purpose.
First came the December announcement of the formation of holding company The Music Group in order to facilitate the acquisition of Midas Klark Teknik (MKT) – as well as making the whole event more palatable to a shocked and surprised pro-audio community by clearly separating the Behringer and MKT brands. In February, CEO of seven years Michael Deeb left the company after what is believed to be a disagreement over the company’s direction; former CEO Arie van der Broek has stepped into the breach.
There was also the announcement of plans to build a "centre of R&D excellence" in the UK; followed by rumours that Uli was seeking to purchase a loudspeaker brand too.
And so to February and the annual Behringer Partner Event in Zhongshan, China – also the centre of Behringer’s manufacturing. This time, and in an effort to dispel gossip and strengthen bonds, the pro-audio press were invited.
At the Event, Uli Behringer announced that the company had grown a whopping 40% in the US in 2009. He said: "It was an extraordinary year for Behringer. Our biggest highlight was for sure the acquisition of Midas Klark Teknik through our parent company, The Music Group.
"We all know that Midas Klark Teknik makes the absolute finest audio products in the industry. Why did we acquire Midas Klark Teknik? They have amazing products and they have developed incredible technology over the past 35 years. The partnership with MKT will tremendously boost technology in our group and we are all very excited to work with them."
Uli went on to discuss what he called "The New Behringer".
"After 20 years we also felt it is time to fundamentally re-invent the company to get us on a new level," he said. Then, in a faux-comedic ‘the cat’s out of the bag’ moment, he revealed the X4000, a new 4,000W DSP amplifier with full networking capability, and a digital mixer due to hit the streets at the beginning of 2011.
The mixer incorporates AES50, the technology used by Midas in the XL8 and later acquired by MKT in September of last year. He went on to announce the construction of a brand new, purpose-built ‘Behringer City’ – three times as large as the current EuroTec site (the name of the company’s manufacturing arm) at a 700-acre (280-hectare) site not far from the current one.
Behringer then announced the next phase of its re-invention: that the company was entering the installation market. With the formation of BIG, or the Behringer Install Group, the company intends to land itself slap bang in the middle of this competitive market: "It’s not just about products," explained ex-IAG Professional boss, now head of BIG, Costas Lakoumentas. "It’s about changing the way we do business and also opening ourselves up to a whole other area of business. It is a significant market. It’s a global market."
Lakoumentas pre-empted nay-sayers by explaining this was not a ‘me-too’ move: "I want to reassure you that we have actually thought about this. We are not just coming out of left field saying we can make one of those as well. We will be a systems supplier; we are not looking to be a speciality supplier of one widget, we are looking to supply end-to-end solutions that address the needs of specific customers."
He was also very keen to point out that the products that BIG would be selling would not be ‘just good enough’ products: "These will be products that can stand on their own; products with unique features, unique industrial design and irresistible value. If you can image a product category, we will be in that category." Lakoumentas continued by providing a sneak peak at the range of mixer amplifiers: noticeable by its absence was Behringer’s ubiquitous brushed silver!
"We are building these products from the ground up, with all of our own intellectual property, with all of our own technology. It’s not about the price; it’s about the feature-set, it’s about insane connectivity!" he enthused and displayed examples of four product families and 22 models in the mixer amp range on the screen.
The 2000, 4000, 6000 and 8000 series of amps provide increasing levels of flexibility and power. The sleek black-box, unibody designs look anything but industrial and instead give the impression that they may have been designed to sit at home on a shelf. The 2404 illustrated connectivity includes loudspeakers, telephone bridging, wireless microphones, graphic equalisation, external power amps and auxiliary inputs. One thing is for certain, BIG intends to come into the market with all guns blazing.
So, where does this ‘New Behringer’ leave MKT? Will it be consumed as many have feared, or will it live, thrive and prosper under a new owner that has money to dish out for R&D and the like? Will manufacturing be moved to China with cheaper components and less quality control?
During a tour of the EuroTec manufacturing site John Oakley, MD of MKT, addressed some of the concerns that many had raised: "The biggest single concern that people have expressed to me is, will Midas cease to be Midas after this acquisition? Well, number one, we are not changing what we are doing at Kidderminster – it will continue to be the Midas manufacturing site.
"Now, what quite a lot of people don’t realise is that we actually do a very limited amount of manufacturing directly under Midas control. We do, in essence, the final assembly and test processes. We buy in printed circuit boards we have designed with all the components already on them and already tested and we assemble them into frames, we then test the complete system and ship it. We also have third-party manufactured complete items. For instance, the Square One Klark Teknik range and some of the input/output devices on the PRO6 and XL8 are already built in China as complete systems," he explained.
The purchase of MKT now allows the company to ‘vertically integrate’ some of its manufacturing into its own processes, bringing it back under Midas control, albeit in China. At the current EuroTec site MKT is to gain its own floor, where initially Square One unit production will be moved, as the technology used in the products is very similar to the technology already manufactured at the EuroTec plant: "As I pointed out, the mixer and electronic testing is very comprehensive, with Audio Precision machines [on] every input and output, and it is identical to the testing we already do at MKT," continued Oakley. "This was one of the things that attracted me to this deal because, to be brutally honest, I didn’t really expect to see that when I came here, for everything I had heard of Behringer. [But] that is just not true, the quality here is astounding, as is the work that has gone into getting the testing right."
At approximately $15,000 per Audio Precision test set-up and with Behringer having a staggering 150 of them in the EuroTec plant, the commitment to quality cannot be underestimated.
Oakley disclosed that, within six to nine months, new designs of sophisticated circuit boards that would typically be manufactured in the UK will be moved to the EuroTec MKT Floor: "Kidderminster is going to be used forever for XL8 and PRO6, and one of the other roles we will have for it is doing some initial prototype validation and early production builds, which need special skills," reassured Oakley.
Manufacturing and assembly is all very well, but with China and Behringer renowned for keeping prices down with often cheaper components, how could Oakley reassure the users of MKT products that the company would continue with its reputation for quality?
"When we were bought by Bosch, they told me we would be able to get much better prices on our components because they had this huge buying power in Europe. It turned out to be buying power for washing machines, cars, drills and garden machinery," Oakley detailed.
"The EuroTec facility builds 200,000 pieces of audio equipment every month. We buy components from the same suppliers that Behringer buy from but you will discover that the components supplied to MKT are built and sold to us at a higher spec standard than the parts that are bought for EuroTec. However, the company supplying them has probably got a large proportion of its business coming into this factory instead of just a few bits for us. We should get some cost reductions on the component, so there is an instant saving here. This is definitely good news."
Ultimately, Oakley had one message: "Midas has innovation in the tagline and we need to do more of it. We want to start doing some research work as well as product implementation. It is the intent that we want to do research work into making live sound products easier to use and setup. They are not MKT specific, they are product and market specific. They will be applied to MKT and Behringer equally. We will be keeping the R&D for Behringer and MKT separate for implementation work but for technology that is going to be shared," he concluded.