With the worst of the pandemic behind them, CEG continues to navigate the challenges of rising fuel prices, higher interest rates and market consolidation – not the mention the shortage of skilled labour affecting the entire industry. But, as they have learned, obstacles can also be opportunities. Ambersphere spoke to CEG’s Director Ben Bowles…
Having steered CEG through the pandemic, co-founders Ben Bowles and Gavin Thorrold have amply demonstrated their ability to think clearly.
“I think our sector is now in a slightly different phase, as we’re starting to adjust to some of the reality of the world around us”, says Bowles, Director of the Cambridge-based equipment rental company, as 2023 takes shape. “I think last year was a bit unrealistic as a benchmark for the future, and we’re now getting into a ‘new normal.”
Defining that new normal, Bowles believes the production industry will change. “It’ll be bigger in some areas, film and TV for example,” he says, “but I feel there’s going to be some contraction in theatre, music and other markets. Also, the corporate event world is challenging, because in these times it’s harder for multi-nationals to look like they’re spending loads of money.”
We can expect caution and uncertainty to play their part in this future, but perhaps the biggest problem in the pandemic’s wake is the skills shortage.
Bowles says, “There are fewer people in the sector than before, so labour is the key issue now – skilled labour is really tricky. I think that’s a problem for the whole economy, and it’s slowing the country down.”
In the event production world there have been reports of companies refusing projects because they can’t be confident of the shrunken freelance pool. “Yes, that fits,” says Bowles. “Ultimately, I think those clients will just stop trying to do things, or push their plans into the future. And for us, postponing is effectively just as bad as not doing it.”
When the right people are found, by whichever route, they’ll find CEG to be a rewarding ground for development. Above all, they will learn winning disciplines, something Bowles sees as indispensible in a business where a higher level of professionalism is demanded from banks, partners and clients.
However, this new landscape is not entirely an obstacle course – there are benefits ahead, he believes. “I think, broadly speaking, with all these challenges, it pays to be more disciplined in every aspect of how you run your business. If you’re more disciplined – financially, operationally, logistically, sales and marketing-wise, in all those things – you’re more likely to succeed. That’s true in bank financing and recruiting: if you run a disciplined organisation, you’ll get the outcomes you want.”
‘Discipline’ is especially relevant when it comes to equipment investment. “Before the pandemic, you might not necessarily have seen it in absolute abundance, shall we say? Now, we’re in a period of higher interest rates, so discipline is essential, both from a cost perspective and in decision-making. If you run away with yourselves and take the first offer that comes along, it might not be at all profitable to run that equipment.
The banks, Bowles believes, are ready to support businesses who properly recognise the key drivers of cashflow.
“Who their customers are, how they pay, where their money comes from, why they pay when they pay, where you’re spending your money, where it’s going and how fast it’s coming in.” Understanding these metrics is critical. “I think we’ll see a consolidation in the market, with fewer players responsible for the majority of investment,” he says. “It happened in the production space, and now it’s happening in the kit space. Because they stuff we’re buying – the cost, the maintenance, depreciation and interest – is not getting any cheaper.”
Today there are endless options for equipment purchase, each with its own equations for cost and benefit. “There’s a whole suite of brands and routes to market,” says Bowles. “Is it worth buying literally direct from the factory? Or from a UK distributor with full support? Some products are totally unique, others less so. There are choices to be made everywhere, and a key part of our business is making sure we don’t get that wrong.”
Although customer demand can steer those decisions, Bowles also accounts for ‘market-making’ – “where you’re setting a theme in the market, as opposed to responding. Ultimately, the kit that’s out there can influence a spec, and end up driving the market. A designer might say, ‘I want Product A’, but if product B is 99% of the way there, and a company has 100 units ready to go, that will be the choice most of the time.”
The increasing viability of IP-rated moving heads makes them an attractive rental option right now, and among the Ayrton units stocked by CEG are the weatherproof Perseo and Domino luminaires.
“We’ve got Ayrton’s Diablo, which isn’t IP-rated, then the Perseo and Domino which are – so small, medium and large effectively,” he says. Of the benefits of the IP models, he comments, “In theory, you should be able to do twice as many gigs with them. Whether you do or not is another matter. It’s less difficult to deal with those items through a full lifecycle of equipment rental – with prep, repair, maintenance and usage. We’re quite early in that process, but I think broadly speaking, we’re probably spending less time repairing kit that’s IP-rated. That all helps ROI.”
MA Lighting is another important brand. Bowles says, “We did MA2 for a long time and we’re just dipping our toes into MA3 now, to see how we get on. MA2 did really well, and I have no reason to believe that MA3 won’t. Consoles can be difficult, because they’re a very personal choice for a designer, operator or programmer. It’s a mtter of preference, so you’re going to win certain users and you’re going to lose others. But MA is good because it kind of works for everything, and connects to everything.”
Discussing Ambersphere’s offering more broadly, he says, “They represent a family of brands that have a synergy between them. Unlike some distributors, they think about that, and how important it is that the brands overlap and cross-pollinate with each other.”
He continues, “Ambersphere support our strategy, what we’re trying to achieve, as opposed to what works best for Ambersphere or the brand that they’re representing. That’s really key. Ultimately, we need a strategy that works for both sides. We have to be able to support manufacturers by purchasing equipment, but they have to support us by providing the equipment we need in a timeframe that works for everybody. They do a really good job of trying to balance that out.”
Another staple, product support, is also appreciated.
“They’re pretty solid with all of that generally,” says Bowles, “either over the phone, or in person if needs be. They always have that understanding, and that probably comes from their heritage of supporting consoles primarily: that requires a different level of support – insofar as if the console doesn’t work, then there’s no show at all. I think other distributors, with a few exceptions, could probably use Ambersphere as a case study for support.”
CEG is worthy of attention too. ‘Kaizen’ – the Japanese concept of continuous improvement, the ongoing circle of ‘build, learn, adjust’ – is a core part of the company culture. Bowles and Thorrold became converts during the enforced hiatus of lockdown, when they found themselves with the time on their hands to consider how to best improve every aspect of their business operations.
“Yes, we’re still pushing that,” confirms Bowles, “continually ‘breaking’ things and rebuilding them to find out what works and what doesn’t. Growing the team and finding people that are compatible with that mindset is always good fun. But yes, we’re still iterating. Perfection hasn’t arrived yet!