By Julius Grafton.
Our story about PSAV acquiring Australian AV supplier Encore Event Technologies from The Freeman Company here, led to an amazing example of price gouging in the uncompetitive and protected USA hotel AV market – by PSAV.
Kate Gallant from leading Australian creative production firm Damn Good picks up the story.
“We recently – this January – did a broadcast out of the Hilton Union Square in San Francisco. We needed an internet connection – nothing tricky, just a normal connection to give internet access. No live stream or anything, just had to upload files. We couldn’t use WiFi (which was free) because our device needed a wired connection. I spoke to the in-house AV guys (PSAV), and asked them for a quote. They said they could do any speed we wanted up to 300mpbs. “Oh” I said “I don’t need that much. Just basic would be fine. Let’s say 20mb up and down”. “No problem” says the friendly in house guy. “I’ll get you a quote”.
This is bog standard stuff – many venue hirers prefer a wired connection, and would sometimes pay a couple of hundred dollars for one to get run out from a nearby wall port.
Kate figured that based on previous experience maybe $300 a day. Maximum.
The PSAV quote? For a 20mbps connection, it is was USD $7,080. a day, plus $605 USD setup. In Australian dollars, that’s AUD $30,397 (not inc tax) for 3 days of regular internet.
“I of course thought he was kidding, Kate says, “or had made a mistake. But no. He attached their price list (which shows a 20mb connection is $6,765, so in fact he had over quoted me by almost $300 a day. Of course I went straight to the nearest T Mobile and bought a WiFi hotspot for $71.”
In the USA hotel and convention centres often impose mandatory Audio Visual services on clients. Until now, The Freeman Company and PSAV were the dominant suppliers. Now they are one, the USA market can expect more of this.
This kind of gouging is unlikely in markets across Australasia where there is more competition and far less pre-conditioning than the USA. Some of the major cities like Las Vegas, New York and Chicago have ‘closed shop’ arrangements at venues that allow unions like Stagehands (IATSE) and Haulers (Teamsters) set rates and call times. In the USA the union is also the agency, so you pay them to supply crew.
Almost all hotel ballrooms and convention facilities have ‘exclusive’ in house AV and increasingly rely on the commissions as a profit centre that far is less visible to a customer who may choose the facility based on a catering price per head. While deliberating over an event with a four course plated meal at – say $200 per head – plus a $60 per head drink package, they may also have a $50,000 band or artist fee in mind.
But they are not equipped to know what an events lighting package and a sound system might cost. That little surprise will come much later, and there is nothing they can do about it.
With PSAV now almost controlling the US in-house market, there will be some interesting times ahead.
• Below: PSAV price chart supplied to Kate Gallant
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