Last year, we decided to answer one question everybody wants to know the answer to, but is afraid to ask: why is event AV so expensive?
From the cost of purchasing, storing, and maintaining quality equipment to the price associated with hiring top technicians and the costs you don’t see, we shared a few major factors in the cost of AV. That being said, there are far more reasons why event AV costs are so high, and why they’ve continued to rise.
Keep reading to learn a few additional elements that impact the cost of AV.
Venue Mark-ups.
Venue mark-ups can show up on your AV budget in a few different ways. While sometimes they are, in the grand scheme of things, a relatively small budget item, other times they make up a huge percentage of your spend. What’s worse is that it’s often something you weren’t accounting for.
The three primary ways we see venue mark-ups are through in-house fees, added costs from using an outside vendor, and union requirements.
In-house fees.
It’s incredibly common, especially in NYC, for venues to have an in-house AV team or a list of preferred vendors.
“Fair enough,” you may be thinking. “There’s got to be some financial benefit to using the venue’s preferred team. Unfortunately, that often isn’t the case.
Venues typically have AV providers on their preferred list for one of two reasons:
- It’s a team they trust to work in and respect their space without causing any damage and upholding their reputation
- They have a contract with the AV provider that adds a venue commission to the AV budget.
That commission, which goes directly to the venue’s bottom line, can vary wildly depending on whether it’s an in-house AV team, what the contract with the preferred external AV provider stipulates, and the terms of your contract.
Sometimes, it’s a relatively small upcharge. Other times, it could be as much as 50% of your total AV spend.
Outside vendor charges.
If you’re thinking about using an AV provider that doesn’t have any kind of contracted agreement with the venue to circumvent those fees, it’s certainly possible that you’ll end up coming out ahead. However, many venues are counting on a cut of the AV budget, which is why they could have a variety of charges that apply to an outside provider that wouldn’t apply to an in-house or preferred team.
The first one is simple: a flat rate charge for bringing in an outside provider. It could be relatively minor, or it could be in the tens of thousands of dollars.
The second is through a “patch” or “tie-in” fees, which essentially charges hundreds or thousands of dollars for the AV team to plug their equipment into the venue’s power source.
Rigging, power, internet, and more charges are other ways that venues recapture the commission they would’ve gotten from an in-house team or preferred vendor.
Union rules.
Union venues mean adhering to union rules. That means:
- Mandatory crew sizes. Union rules may dictate a larger crew than a non-union team would recommend for an event
- Higher labor rates. This isn’t always true, and some specialty or highly sought after technicians may be just as expensive as union labor. However, you have more more control over who you choose to book on your show
- Strict hourly rules. Mandatory minimums and strict penalties around meal breaks and overtime leaves little wiggle room, where an outside provider may be willing to offer some flexibility.
Recent Market Inflation.
Over the past six years, AV costs aren’t the only thing that’s been on the rise. The effects of inflation have been felt far and wide, and live events aren’t an exception.
Here’s how inflation plays into rising AV costs:
Equipment costs.
It costs more to buy equipment, and it costs more to maintain equipment. Replacement parts are more expensive, tools to repair equipment are more expensive, and the initial purchase price for new gear is much higher than it was 10 years ago.
Tariffs.
Equipment that is purchased from an international company is often subject to tariffs that raise the initial investment significantly. Even products that are manufactured domestically or come from a US company may be subject to tariffs if certain components or materials used in the equipment come from overseas.
Supply chain challenges.
Supply chain challenges don’t just mean that products may take longer to reach us. It means that shipping expenses are higher, components of gear are not as readily available, and surge pricing for shipping, especially with heavy or fragile AV gear.
Labor shortages and rising wages.
When the COVID-19 pandemic temporarily halted events, it left a huge number of technicians to find new jobs or industries. When events came back tenfold, some technicians did, too. But not all of them did.
This resulted in an ongoing shortage of high-quality, experienced technicians. Many of these technicians have raised their rates due to the increased demand for their services and to keep up with the cost of living.
Logistics Costs.
Logistics costs went up during the pandemic, and while many people assumed they’d eventually fall, they never quite returned to the pre-pandemic rates. In fact, they’ve continued to rise.
There isn’t one single reason logistics costs are so high, but a few that have had a big impact are:
- Fuel prices and volatility in fuel costs
- Workforce shortages
- The time-sensitive delivery windows of live events
Of course, gear isn’t the only thing that needs to travel for live events. Technicians, especially specialized or highly sought after team members, often aren’t local to their events. The cost of flights, ground transportation, accommodations, per diem, and more become line items on the AV budget.
Are you looking for an AV quote for an upcoming event? Our team is here to help! Contact us today to learn more about our services and receive a comprehensive, transparent quote.