Monday, June 7, 2010

Merger the only answer....

How much will they gouge the market in the future remains to be seen. When there is only one big company capable of doing the festivals, arenas and stadium shows you can guarantee it will happen. If JANDS are involved it is a certainty.

Back in the 80's JANDS had a monopoly on the sound production business in Australia, created by buying other companies and forming alliances overseas. The major shareholders at the time made a killing, and it seems they are about to do the same again. Back then international acts had no choice but to use whatever JANDS had. Nowadays they bring their own sound equipment with them, despite the great expense, because they they can!!

The history of the two firms in fierce competition ultimately bought the prices down to such a ridiculous level that they are unsustainable in the long term.

There is no doubt this merger was prompted by the need to drive the price back up again at both companies. In collusion, of course, would be illegal but as a merged entity it is achievable.

Neither company can afford another summer in Australia. Especially not with the big players in the USA, UK and Europe shipping sound equipment out for the artists on their roster of acts.

The promoters will be the big losers. They benefitted from a decade of low prices on sound production, Soon they will not be able to 'peg' one off against the other to get a cheaper deal. Whether they pass the extra cost onto the consumer is anyones guess.

In most mergers about 20-25% of staff go due to layoffs, natural attrition and centralisation.

Existing crew in both organisations may find working with each other a little 'prickly'. Competition amongst the contractors will intensify, even across borders with a cross pollination of crew on gigs across Australia.

In a competitive environment the contractors will be jockeying for position and have to be willing to drop their price to get the work.

Sadly, it will be the crew who will come off the worst in all this. Certainly more work is on the horizon but working for less money and longer hours will make the whole merger thing unattractive in the long run.


Anonymous said...
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Anonymous said...

As a freelancer I am concerned that if this merger goes ahead there will only be two companies in Australia that do the calibre of work I am experienced in. As it is I struggle to get paid well given my age and experience and this will only force the contract rates/day rates, what ever you want to call them, spiralling down.
Neither company will be willing to pay any more because quite frankly they wont have to. There will be plenty of guys looking for the 'big time' work and they will dictate the price and you have no where else to go!!

it's bad for all ... maybe not for the owners.

Anonymous said...

Jock Bain was the prime loss of the merger for those who know the real story. RIP Jock.